Bitcoin and other cryptocurrencies have fallen sharply as investors dumped their risk assets. A cryptocurrency lender called Celsius has suspended customer withdrawals, raising the threat of spillover to the wider market.
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Bitcoin It hit its lowest level since December 2020 as investors dumped cryptocurrencies as risky assets sold out, falling below $ 24,000 on Monday.
Meanwhile, a cryptocurrency lender called Celsius has suspended the withdrawal of customers, causing fear of spillover to the wider market.
According to CoinDesk data, Bitcoin, the world’s largest cryptocurrency, temporarily fell below $ 24,000 around 5 am on the ET and soon exceeded that level.
From the weekend to Monday morning, more than $ 200 billion was wiped out of the entire crypto market. Cryptocurrency market capitalization fell below $ 1 trillion on Monday for the first time since February 2021, according to CoinMarketCap data.
Macro factors contribute to the bearish crypto market, Inflation continues to be rampant And the Federal Reserve Board Raise interest rates this week Controls price increases.
Last week, the US index sold out significantly. Tech-intensive Nasdaq plunges.. Bitcoin and other cryptocurrencies tend to correlate with stocks and other risk assets. As these indexes go down, so do the ciphers.
“Since November 2021, the Fed’s rate hikes and inflation control have changed sentiment significantly, and we think that FED may eventually need to work on the demand side to control inflation. We may also be seeing a recession, “development and internationalization at the Fed’s Reno told CNBC.
“All this hasn’t completely bottomed out in the market, and if the Fed can’t take a break, it’s unlikely that the bulls will come back,” he said.
Ayyar said Bitcoin has fallen about 80% from its previous high in the previous bear market. It is currently down about 63% from its all-time high in November.
“The price of Bitcoin could drop significantly next month or two months,” Ayyar said.
Celsius’Add fuel to fire’
The crypto market is the so-called algorithm stablecoin terraUSD (UST) and its Sister cryptocurrency Luna has collapsed..
Now the market is worried about a crypto lending company called Celsius that said it was on Monday. Pause all drawersSwaps and transfers between accounts “due to extreme market conditions”.
Celsius, which claims to have 1.7 million customers, advertises to its users that it can get a yield of 18% through the platform. Users deposit their code in Celsius. The code is then lent to institutions and other investors. The user then gets a yield as a result of the income earned by Celsius.
However, the sale of the crypto market has hurt Celsius. According to the company’s website, the company’s assets were $ 11.8 billion as of May 17, down from more than $ 26 billion last October.
According to CoinGecko, Celsius’ own coin, CEL, has fallen by more than 50% in the last 24 hours. Investors are concerned about widespread transmission in the crypto market.
“The situation in Celsius is definitely adding fuel to the fire,” Ayyar said.
“While the market was already under inflation concerns and rising interest rate pressure, cryptocurrencies have such infectious events as the market is so closely linked to various interconnected protocols and businesses. It can cause a significant decline. “
